Requesting Input on 360 Purchase Plan

Good day everyone. I am a long time lurker in these forums (occasional poster) and cannot express just how valuable all of the information here has been. As such, a hearty thank you is certainly warranted.

That said, I am now looking for some input and guidance from the more seasoned owners here at F-Chat with the plan of purchasing my first Ferrari. My wife and I have discussed this at length and have agreed on a plan of action that am I curious to gain input on from all parties here. In essence, she is the more fiscally prudent one of us (we are both CPA's), but is willing to entertain the Ferrari idea if we attempt a soft entry into the waters first.

Here is our plan:

She is hesitant, and justifiably so, to pull the cash needed for the purchase permanently out of our investment or savings accounts and has suggested a trial run, so to speak.

Car: 2004 Ferrari 360 Modena or Spider, 'higher miles' of around 20K-40K, excellent example with solid records and ownership history. General price points for this car seem to be around $70K-$80K range. This will be a cash purchase. I would drive the car on occasion to work when the weather is nice and around town or small road trips on the weekends. Expected mileage should be around 4,000-6,000 during the period of ownership.

Plan: Purchase the vehicle with intent to sell within 12-18mos. Budget for expected maintenance, repairs, and any depreciation is $5K-$10K, with a total reserve set aside for unexpected repairs of an additional $15K-$20K. So the plan is to be able to tie up no more than around $100K-$110K in liquid assets for the period of ownership and with the expectation to only be down less than $10K for the period of ownership, less any loss in investment yields.

If we thoroughly enjoy the ownership experience, then we would pull some cash out of our annual budgets we do (yes, we are that nerdy) and purchase one for long term ownership once we have the additional cash saved (would take about 3-4 years to siphon off the extra cash needed to buy one without delving into savings).

Here is our financial situation in a nutshell:

Ages: 42, 37, plus a 4yo daughter
Income: Household income is about $240K/yr - however we live in an extremely low cost area of the country (East Tennessee).
Debts: None. Home is paid for, nor do we have any other debt of any kind.
Non-Retirement Liquidity: $120K in checking,savings and other cash deposits, $210K in non-retirement investment accounts.
Retirement Savings: $440K in 401(k)' and $285K in Roth IRA's.


What is everyone's thoughts on this?

 

You only live once

It is good that your plan includes the out for if the experience does not work out

But you may really enjoy and decide to keep the car further (although I'm not entirely convinced by your maintenance & depreciation total - you must not count on the latter being close to zero - reconcile it to yourself as being the same as the annual depreciation on any SUV )

Good luck & enjoy

 

Thanks for the feedback. Curious as to your thoughts on the depreciation variance. I've been researching this for more than a year, and it seems that nearly all the 15-25yo F-car markets (360/355/348) seem to be relatively stable as it comes to depreciation curves. I'm not seeing a huge variance (no more than 10-20%) between the first and last year 360 prices. I know this could change, of course, and the past performance is not indicative of future results, but I have to base my guidance on something.

Am I missing an important factor here?

 

If there is anyone that can easily pull this off based on your numbers, its you. The only word of warning; on any Ferrari is to be sure to get a PPI before purchase to limit any surprises. But paying cash is the best approach to avoid the interest, and the amount of depreciation should be minimal based on your expected time of ownership. And you never know, you might just fall in love with it and keep it for a long time!

 

Thanks for the positive feedback!

The desire to keep it and not sell it is the driving concern with my wife as well.

She has that legitimate worry and I won't be surprised to see her have me sign something saying I can't keep it, so she can pull it out a year later when I don't want to give it up! (in jest, of course, we are actually very sweet to each other). I offered the idea that to avoid that, we could just put it off for a few years and just save up and by a long term one in a few years - but she is nervous to put out that kind of capital outlay without trying the ownership experience first to make sure it is worth it (e.g. we drive the car enough, enjoy it enough, etc.) She enjoys cars as well (she has never owned an automatic, and currently drives a M/T VW Passat - don't even get me started on how hard that was to find), so she will want to drive it a bit as well.

With respect to the PPI - this is a mandatory item for us for sure. There are several shops for us to use in Atlanta and Charlotte, as well as Knoxville - all of which are just a couple hours away. We are going to attempt to find a car within this area, but if we cannot - we will expand the search a bit.

 

If you have concerns about the car, rent one for a few days. Turo or other exotic rentals. Otherwise go for it, life is too short.

 

Go for it. It’s good you’ve thought it through, but don’t overthink it. Moreover, you’re biggest problem (opportunity) will be finding a good car. A 360 can be a hand grenade. You don’t want to buy one that has the pin pulled. You need to be patient and look and look and look, then look again. But when you find a good car, buy it. Don’t fiddle fiddle around. Also remember, Ferrarichat is your best friend.


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This would be an example of what we are looking at. We would prefer Red/Tan, for both our desire and resale - but this one has the Daytona seats, Tubi, and recent belt service and is from a dealer we have heard good things about.

https://www.foreigncarsitalia.com/used-Greensboro-2003-Ferrari-360-2DR-ZFFYU51A030130345

 

Good luck with your search! You can find some killer cars for 80k. Did you ever think about a F355?

 

Thanks! To respond:

1) Yes, I personally like the 360 better as it is more 'modern' in every way, however, I would be perfectly happy with an F355 or even a 348. The problem with both of those, of course, is that (a) the prices are not really much lower for a great example than that of a 360 and (b) those dreaded engine out services scare the you-know-what out of me.

2) Yes, with respect to the $80K price budget, we are well aware of the old adage "You can't pay too much for a cream puff and you can't pay too little for a piece of crap". I would rather stick to the upper end of the market and get a really clean example, as I feel it will be easier to get my money back out of it later and we all know that there is nothing more expensive than the cheapest Ferrari, right? LOL.

 

I believe that dealer has a good reputation, too. I see nothing wrong with your plan or ability to do this with undue risk. Good luck!

 

I feel you man, just don't get excited too early and wait for the perfect one

 

You have obviously already figured out you can afford it.
With that much thought and planning towards a potential purchase, it's puzzling why you wouldn't drive one first and see if its the right car for you.

And if you really are going to keep it for only a short time, and 12-18 mo IS short, why not finance it?

 

I want to commend you on your respectful post with lots of details. I think your in great shape to pull the trigger.

That said, I personally would wait until next recession. Of course the problem with that is it's not a guarantee prices will go down, but it's been my experience they usually do.

We've had an economic expansion for quite some time, so without delving to deep in P&R, I think we're due for a healthy cycle.

Best wishes to you, and keep us updated on what you end up doing!

Cheers

 

While I agree with you about storm clouds on the horizon, 360s are already fully depreciated. Worst case is they might fall another 10%, $8k on a $80k car?

Now I’d be really worried if I owned a 458 or 488.


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With that kind of cash and assets you would be buying his and hers, then let each decide whether or when you want to keep or sell the vehicles.

 

I think you should get a 430. The amount of depreciation will probably be the same and the driving experience will be more enjoyable

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Thanks for the input. Please note, as I may not have clarified this in my original post, I have driven several 360's as well as 458's and other exotics over the years. It isn't the car itself that we are looking at 'testing the waters' with, it is the idea of making such an extravagant purchase. We are very fiscally conservative people, so this would be a bit out of the box - but we do both love cars (albeit me much more than her).

With regards to financing - we don't borrow money - ever. So that is a non-starter. Heck, even our house we built was only about 8mos of our income. So that should help with understanding our mindset when it comes to spending money, lol.

Thank you for the kind words. While we will certainly be prudent in looking for the right car, I am unsure if waiting for the next recession is the best option for us. I can understand that plan of action if we were already entering into a recession and it might make sense to ride it to the bottom before the purchase, but I hesitate to wait until one 'might come along'. There is no promise that it will happen soon, just that some indicators say so. Not sure if that makes sense to you or not?

You may have read the original post with one too many zeros in it, haha. We are solidly upper middle class, certainly no more than that. In addition, we are very fiscally conservative. See my above post.

While the 430 is certainly a nicer vehicle, and may even be an option as a long term ownership car should we decide to pursue that route later on, I don't believe one will fit the budget we have set aside for this purchase. They all seem to be quite a bit more than the 360s. I certainly appreciate the recommendations though!

 

You make a good point and the truth is I have no guarantee what potential drop (if any) 'may' occur. Just sounded like the OP is conservative (like me), so just saying what I would do.

 

Makes complete sense, and again I applaud your thoughtful approach to your purchase. You're absolutely right that a 'dip' may never come!

My advice now follows others, do a lot of due diligence on the condition on the car, and I have no doubt you'll have the Ferrari grin in no time!!

Best wishes to you!

 

I congratulate you are being financially sound and having no debt. It seems like you are having a problem with actually spending money on something that makes no financial sense. In fact, it is actually wasting money from a financial standpoint. I know people who have spent their whole life making money, but cannot spend and enjoy it. I have a friend who is a multi-millionaire. One day at lunch he says that it bothered him for 24 hours that he didn't pick-up a penny laying in the gutter. After having open heart surgery he started buying nice cars. What good is earning money if you cannot enjoy it. Remember, you cannot take it with you. Someone else will get it after you die.

 

Of course, and I certainly understand that there is a thin line between being financially responsible and being a miser. You did hit the nail on the head with respect to not wanting to spend money on something that has no financial sense. There must be a balance - I currently daily drive a BMW convertible. Certainly not an expensive car (I bought it slightly used), but certainly not a cheap car either - so it was somewhat of a fiscally poor decision. The point is where you draw the line, notably when it comes to cars. Do you stop at a Yaris? How about a BMW? A Ferrari? A Bentley? etc.... you get the idea.

The main reservation is two fold:

1) Not a big fan of work, lol. As such, don't really want to do it for longer than I have to. So the plan is to have enough to retire at around 60 or so and live well of investment returns and savings. Any major purchase would obviously impact this. Hence the hesitancy.

2) With respect to 'someone else will get the money when we die' - you are right, our daughter! As such, while I am not earning money to make her a millionaire one day, we certainly want to make sure our hard work also benefits her later in life, assuming she grows into a wonderful young woman, which seems to be the case to date (although obviously too young to really tell).


Thanks again, everyone, for all the recommendations and pointers so far.

To add another question to all those responding - when purchasing your first F-Car - how far did you cast the net for your search? Please disregard this comment if you are in a much higher income bracket than me - obviously if I had far more expendable income, I would be less concerned about making numerous air travel trips to see cars, but that has the ability to get rather pricey quickly.

 

I limited my search to 500 miles. I'm in the same income bracket as you so I figured that worse case scenario, I could drive and make it a weekend getaway with the wife and see the car at the same time. I was fortunate and found my F430 50 miles from my home. Good Luck with your search and make sure that you get a PPI before purchasing.

 

You are looking at a high mileage F1 and are budgeting $70-$80k? No offense to anyone, but I'd top at $70k for a cream puff. There are way too many out ther and they are not in demand. There's a gated 360 spider fire sale for $70k on this forum and you may end up wanting to keep it, not to mention that you may just be able to negate the depreciation aspect of your plan.

 

I should clarify that I would MUCH rather a gated manual over the F1 tranny. I have to be real with my expectations, however, and I worry that I am substantially reducing my market should I purchase one, since about 80% of all buyers want the F1. I thought that gated 360 on here was a 2001? I really want a 2002 or newer.